The economic agreements signed by China and Russia during Russian Prime Minister Vladimir Putin’s 12-14^th October visit to China, demonstrate the potential for rapidly transforming regional as well as bilateral international relations, if Lyndon LaRouche’s “four power” agreement among the U.S., China, Russia, and India is carried out. The agreement under which China will help Russia construct a national high-speed rail system, can play a key role in helping China break from its current dependency on labour-intensive exports to the West.

As a commentary published in the Chinese People’s Daily on 16^th October stated, the memorandum of understanding on high-speed rail construction in Russia, signed by the Chinese Ministry of Railways and the Russian Ministry of Transportation, “signifies that China’s one-sided importation of technology from Russia has come to an end. Nowadays, it is China’s turn to help Russia build high-speed railways. Besides, China can also import nuclear technology from Russia, while exporting to it the related technology for liquefying high-quality coal at high temperatures.”

China has been building a huge national high-speed rail network since 2005, which will have 13,000 km of track by 2012. The cooperative project will both reconstruct existing lines in Russia and build new ones dedicated to trains which can run 350 km/h or more, will increase Russia’s high-speed lines from 650 km to 10,900 km over the next 20 years. The two nations also signed a freight transport agreement on 14^th October, which will increase traffic between China and Europe.

The next day, Russian and Chinese enterprises signed an agreement to build a “super shipyard” in Vladivostok, ships, and other maritime infrastructure using the most modern technologies, Novosti reported 17^th October. Eastern Russia lacks modern shipyards, an area where China has been moving forward, and the project will reduce Russian dependence upon foreign builders.

Other Eurasian rail cooperative projects could also be pulled off “the back burner,” where they have languished the past several years. On 15^th October, Russian Railways head Vladimir Yakunin signed an agreement with Mongolia’s Transport Minister Khaltmaa Battulga, to build a railway which will make it possible to exploit mineral resources of the South Gobi region. As Yakunin stated, the rail line will give landlocked Mongolia access to Chinese, Russian, and North Korean ports. Chinese, U.S., and South Korean officials and entrepreneurs were present at the conference on expanding Mongolia’s rail network, where the agreement was signed.

In India, Prime Minister Manmohan Singh has proposed using China’s massive rail construction, as the benchmark for India to expand and rebuild its own large but dilapidated rail system, the Hindustan Times reported 17^th October. China has been expanding its rail network at least three times faster than India has, and investing 50 times more funds. China has also been requested by Kathmandu, to expand its Tibetan rail line to Nepal. The project could stir India to build long-discussed rail lines into the Himalayas.

Lyndon LaRouche commented that the action by China to invest in these development projects in the Far East will tend to bolster the physical value of the U.S. dollar—and thereby the world economy—in opposition to the alarming devaluation of the dollar by the U.S. Federal Reserve and Treasury Secretary Timothy Geithner.

“What you have, is you have a virtual bond issue kind of thing in China,” Mr LaRouche said. “That trillions of dollars of U.S. debt to China have been institutionalised in the form of a bond issue and similar kinds of things. Now, the point is, the bond issue as such, is one-sided, it’s just the debt of the United States. The only thing that secures that debt of China, is the debt of the United States. So if the United States goes down, with just that bond issue sitting there, as presumably against the U.S. dollar, and the dollar sinking, that bond issue isn’t worth much.

“However,” Mr LaRouche continued: “If the government of China takes the U.S. dollars which are owed to it, in terms of the bond issue, and uses those dollar assets as credit for a large-scale railway and related agreement with Russia, and with other nations of that region, implicitly, suddenly, since that money, represented by the bond issue, used for that purpose, is actually invested in something which has worth, you have now effectively monetised it. That is, you have made it, negotiable, it’s a negotiable asset. It’s not an asset hoping to be rescued by the debt on the United States which will never pay it. Now, those U.S. dollars, involved in this Chinese bond issue, being invested in this cooperative operation with Russia, on rail and related developments, has now got some intrinsic worth to it, in terms of these physical assets it’s creating.

“So that, in itself, is a very important, and a very significant step. It is specifically a step in the direction of what the Four Power agreement would represent. And we don’t mean just four nations, we mean the four nations-plus—that is, the nations who will jump in on the same package, together with the Big Four. … It’s a substantial step in that direction.”

Mr LaRouche concluded, “All that’s required now, since India will easily come into this thing, and since nations such as Korea, including North Korea, Japan, Mongolia, and other countries will come into this game, this is a very significant development. It’s not one that’s going to solve all the problems in the world. If the United States joins this thing, as a Four Power agreement, the way I’ve indicated, then we’re on the road to rescuing the world from the greatest threat to civilisation in known history.”

Watch a 17 minute video, "The Credit Dollar: Steps Toward the Big Four", here.